Fink v. Time Warner Cable

• Decision Date: 06 May 2013
• Docket Number: No. 12–0299–cv.,12–0299–cv.
• Citation: 714 F.3d 739
• Parties: Jessica FINK, on behalf of herself and all others similarly situated, Brett Noia, on behalf of himself and all others similarly situated, Plaintiffs–Appellants, v. TIME WARNER CABLE, Defendant–Appellee, Time Warner, Inc., Defendant.
• Court: U.S. Court of Appeals — Second Circuit

714 F.3d 739

Jessica FINK, on behalf of herself and all others similarly situated, Brett Noia, on behalf of himself and all others similarly situated, Plaintiffs–Appellants,

v.TIME WARNER CABLE, Defendant–Appellee,Time Warner, Inc., Defendant.

No. 12–0299–cv.

United States Court of Appeals,

Second Circuit.

Argued: Oct. 26, 2012.

Decided: May 6, 2013.

Michael R. Reese (Belinda L. Williams, on the brief), Reese Richman LLP, New York, NY, and Stanford P. Dumain, Joshua E. Keller, Milberg LLP, New York, NY, for Plaintiffs–Appellants.

Jonathan D. Thier (Jason M. Hall, Mark S. Pincus, on the brief), Cahill Gordon & Reindel LLP, New York, NY, for Defendant–Appellee.

Before: CABRANES, CHIN, and CARNEY, Circuit Judges.

PER CURIAM:

Plaintiffs–Appellants Jessica Fink and Brett Noia (“Plaintiffs”) appeal from a judgment of the United States District Court for the Southern District of New York (Laura Taylor Swain, Judge ) dismissing their Second Amended Class Action Complaint (“Complaint”) pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. We conclude that the allegations stated in the Complaint—which raise claims related to deceptive advertising by Defendant–Appellee Time Warner Cable (“Time Warner”)—lack facial plausibility sufficient to withstand a motion to dismiss. Accordingly, we affirm the judgment of the District Court.

BACKGROUND

Plaintiffs challenge the veracity of certain advertisements in which Time Warner allegedly described its Road Runner Internet service (“Road Runner”) as providing (1) an “always-on connection” (2) at a “blazing speed” (3) that is “up to 3 times the speed of most standard DSL packages and up to 100x faster than dial-up” and (4) the “fastest, easiest way to get online.” Plaintiffs, who sue on behalf of a putative nationwide class consisting of Road Runner subscribers, allege that these advertisements were false and misleading because Time Warner engages in network management techniques that decrease the speed at which Road Runner subscribers access certain high-bandwidth Internet applications. Plaintiffs assert that Time Warner's allegedly deceptive advertisements violate New York General Business Law § 349 and various California consumer protection statutes, and give rise to claims for common law fraud, breach of the implied covenant of good faith and fair dealing, and unjust enrichment.¹

DISCUSSION

We review the grant of a motion to dismiss de novo, accepting as true all factual claims in the complaint and drawing all reasonable inferences in the plaintiff's favor. Capital Mgmt. Select Fund Ltd. v. Bennett, 680 F.3d 214, 219 (2d Cir.2012). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. This standard demands “more than a sheer possibility that a defendant has acted unlawfully.” Id. “Plausibility ... depends on a host of considerations: the full factual picture presented by the complaint, the particular cause of action and its elements, and the existence of alternative explanations so obvious that they render plaintiff's inferences unreasonable.” L–7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 430 (2d Cir.2011).

To prevail on their consumer fraud claims under New York and California law, Plaintiffs must establish that Time Warner's allegedly deceptive advertisements were likely to mislead a reasonable consumer acting reasonably under the circumstances. See, e.g., Freeman v. Time, Inc., 68 F.3d 285, 289 (9th Cir.1995); Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 26, 623 N.Y.S.2d 529, 647 N.E.2d 741 (1995). It is well settled that a court may determine as a matter of law that an allegedly deceptive advertisement would not have misled a reasonable consumer. See Freeman, 68 F.3d at 289;Oswego, 85 N.Y.2d at 26, 623 N.Y.S.2d 529, 647 N.E.2d 741.

At oral argument, we observed that the record did not contain the allegedly deceptive advertisements upon which Plaintiffs base their suit, and, because the precise formulation and context of Time Warner's representations are pivotal to Plaintiffs' claims, we asked Plaintiffs to supplement the record accordingly. Plaintiffs have since submitted a single advertisement which, they assert, “was identified as the source of the misleading statements alleged in paragraph 20 of the Second Amended Complaint.” Pls.' Supplemental Submission at 1.

Plaintiffs' submission is perplexing. The advertisement that they offer is dated August 7, 2009—nine months after Plaintiffs filed suit. In addition, the advertisement contains only one of the four misstatements alleged in the Complaint. The “always-on,” “blazing speed,” and “fastest, easiest way to get online” allegations are still missing any source document. Because paragraph 20 of the Second Amended Complaint discusses only one of the misstatements, the assertion Plaintiffs make in their supplemental submission is technically accurate. Yet we are left to wonder where to find the advertisement containing the other three misstatements. The Complaint purports to quote the offending advertisement verbatim; we would not have expected it difficult for Plaintiffs to produce. Plaintiffs' failure to address—much less explain—the gaping hole in their submission is conspicuous.²

The primary evidence in a consumer-fraud case arising out of allegedly false advertising is, of course, the advertising itself. And in determining whether a reasonable consumer would have been misled by a particular advertisement, context is crucial. For example, under certain circumstances, the presence of a disclaimer or similar clarifying language may defeat a claim of deception. See, e.g., Freeman, 68 F.3d at 289–90 (upholding the dismissal of a challenge to a sweepstakes mailer where the mailer explicitly stated that the plaintiff would win only if he had the winning number); Broder v. MBNA Corp., 281 A.D.2d 369, 371, 722 N.Y.S.2d 524 (1st Dep't 2001) (“[T]here can be no section 349(a) claim when the allegedly deceptive practice was fully disclosed....”).

A plaintiff who alleges that he was deceived by an advertisement may not misquote or misleadingly...